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So after a decade of loyal service my Klipsch 4.1 system has given up the ghost. Looking about on the internet I see that Klipsch has mostly gotten out of the computer speaker business.

I loved this speaker system and see that on amazon I could replace it with a 2.1 system for 150 bucks but before I pull the trigger on that I am wondering if anyone has any recommendations for something that sounds decent in the $100 or less category.

Ooh, you probably don't want to do it that way, with a splitter. You want a device with an actual crossover, so it will send the bass to the sub, and the regular audio to the main speakers.

If you really want to do it properly, you probably want a small receiver and bookshelf speakers. You don't have to spend a mint, and you can often figure out clever ways to mount these devices to minimize the space you take up, but all small satellite speakers make large tradeoffs in terms of sound quality. A $250 receiver, a $500 pair of bookshelves, and a $250 sub could last you a decade or two, but if you try to skimp out and buy cheap, you'll probably end up replacing everything within just a few years.

Have you thought about buying used? Receivers in particular depreciate very quickly, but good receivers sound great for ages. Go back a few years to a 2008 or 2009-era Denon or Onkyo, and make sure you get one with the analog multichannel inputs, and you'll be in pretty good shape for quite awhile. You oughta to be able to get a pretty beastly setup on the cheap.

Speakers don't depreciate as fast, because they take a LONG time to wear out. I still use a set of speakers I bought, geeze, probably fifteen years ago, and they still sound great.